The Japanese carmaker’s decision to shut its Swindon factory is part of a pattern in which Brexit uncertainties play a significant role
First, the uncontroversial bit. Honda’s decision to close its factory at Swindon is a body blow to the west of England economy, to the British car industry, and to the UK manufacturing sector more widely. It will not be easy for the Wiltshire town to absorb the massive hit. Now, the more controversial part. The Japanese carmaker’s decision reflects several factors. These include a Europe-wide market shift from diesel to electric cars. But it unquestionably also reflects continuing uncertainty about Brexit’s impact on the UK economy and the fear of a no-deal exit from the EU – and anyone who pretends otherwise is simply not telling the truth.
Honda has been in Swindon since 1989. It came because the UK went to great lengths to persuade the car giant that Swindon was the right site to supply the European Union market, of which Margaret Thatcher’s Britain was a keen advocate. Output has declined since the financial crisis, leaving only one model, the Civic, in production at a factory that used to produce three. Nevertheless, until now, Honda has not closed a vehicle factory in its 70-year history anywhere in the world. It has also tried hard to keep Swindon open, even though production of 160,000 vehicles a year there is “sub-scale” when compared with the output of 2m in China and the US. Now Swindon is to close in 2021, leaving 3,500 Honda workers out of work, along with at least that number in the supply chain and associated businesses.